The shares of City Union Bank opened at Rs 197.40 apiece on NSE, sharply lower than Thursday’s closing price of Rs 256.80 apiece. However, the decline was solely due to the bonus share adjustment and did not reflect any loss in shareholder value.
In reality, the stock gained more than 2% to trade at Rs 202.10 apiece after adjusting for the bonus issue, as seen at 10.20 am.
All about City Union Bank’s bonus issue
City Union Bank announced a 1:3 bonus issue in April, meaning eligible shareholders will receive one equity share for every three fully paid-up equity shares held in their demat accounts on the record date.
The bonus shares will be issued using nearly Rs 25 crore from the lender’s securities premium account, whose balance stood at more than Rs 940 crore on March 31, 2026. Later in May, City Union Bank fixed June 12 as the record date to determine the eligibility of shareholders for the bonus shares.
Notably, this marks the first bonus issue by the lender in eight years, since a 1:10 bonus issue in 2018. A bonus issue consists of free shares distributed by a company from its reserves and is often seen as a sign of strong financial health and growth prospects. While the issue of bonus shares increases the total number of outstanding shares, it does not change the company’s market capitalisation. However, it can improve liquidity and affordability, allowing more investors to add shares of the company to their portfolios.
Also read: Bonus bonanza! City Union Bank shares for 1:3 reward
City Union Bank share price
City Union Bank shares have gained more than 9% in one week, and nearly 10% in one month. Shares of the company have fallen over 7% in 2026 so far. In the longer term, they have gained 37% in one year, 115% in three years, and 58% in five years.The bank reported a 25% year-on-year rise in net profit to Rs 359.56 crore for the fourth quarter of FY26, up from Rs 287.96 crore reported in the corresponding quarter of the previous financial year. Its net interest income (NII), meanwhile, increased around 31% YoY to Rs 785.83 crore during the quarter under review.Also read: Why are markets rallying today?
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
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